CEO Diane Greene Prepares to Exit Google with Its Enterprise Cloud Play Still Incomplete

A. DeCarlo
A. DeCarlo

Summary Bullets:

  • Diane Greene led the Google Cloud enterprise charge, helping the provider make up lost ground with an ambitious agenda that included significant acquisitions, investments in AI, and new strategic partnerships.
  • But, for all of Google’s forward momentum, the provider still hasn’t closed the gap with IaaS leaders AWS and Microsoft Azure.

As Google Cloud chief Diane Green gets ready to hand over the reins to her successor, former Oracle exec Thomas Kurian, the industry is taking a moment to reflect on the progress and conflicts that marked her term. When Greene joined Google in 2015, despite the company’s status as an Internet titan, the organization was an underwhelming performer in the enterprise cloud.

Google was late to the cloud party, not launching its first cloud service until 2011 – years after AWS. And while its initial developer-centric IaaS focus was extremely attractive to its largely cloud-native customer base, it had little appeal to the mainstream enterprise clients that top-tier providers Amazon Web Services and Microsoft Azure were winning.

Greene set out to change that with efforts to make Google Cloud more appealing to the enterprise masses. Through efforts to unify formerly separate products under the Google Cloud Platform brand, Greene created a more cohesive portfolio and a more streamlined sales strategy. Google Cloud expanded alliances with key strategic partners including Rackspace, Cisco, SAP, and Deloitte to help clients navigate the challenges of migrating to and managing application workloads in hybrid environments. During Greene’s term, Google Cloud also made a big bet on artificial intelligence as a means to distinguish the organization from some of the more dominant providers.

Google Cloud scored some major wins, including both corporate clients such as HSBC, Target, and 20th Century Fox and tech-centric businesses like Twitter. And while Google parent Alphabet doesn’t break out cloud-specific revenue figures, indicators show strong sales growth for cloud solutions. Under the ‘Other Revenues’ umbrella in the Q3 2018 financials, Google posted $4.64 billion in sales, an increase of just under 30% from the same period in 2017. By comparison, in Q4 2015 (the first quarter of Diane Greene’s tenure), Google reported ‘other revenues’ of only $2.1 billion.

But, as impressive as Google’s enterprise cloud gains have been, the provider hasn’t kept pace with the growth top-tier IaaS providers have posted. In Q3 2018, AWS reported revenues of $6.68 billion. And Google’s cloud growth has also come at great expense. This year, Google boosted infrastructure spending by $3 billion to $12 billion.

While Google Cloud made some acquisitions during Greene’s term, most notably the $625 million deal to buy API management company Apigee, the provider missed out on a number of other opportunities to expand its capabilities, including the chance to buy Red Hat, which IBM is scooping up for $34 billion.

There have been reports of internal conflicts between Diane Greene, other Google Cloud executives, and employees over the company’s direction and some contracts, including the Defense Department’s Project Maven deal. When 3,000 employees objected to Google developing AI technology to help DoD employees more quickly scroll through images captured by drones in support of counterinsurgency and counterterrorism operations, Google pulled out of the contract.

According to reports, Greene initially resisted the call to withdraw from the deal, adding to internal tensions. Now, weeks later, she is preparing to leave the organization, though not its parent company’s Board of Directors. Greene has been very clear that, if anything, she stayed at the helm much longer than the two years she had originally planned.

Kurian, Greene’s replacement, has enterprise bona fides similar to his predecessor, having spent more than two decades at Oracle, most recently as president of product development. Google Cloud seems likely to continue to expand its corporate client base. How successful it is in that pursuit depends on more than just messaging that it is an enterprise-friendly innovator; the organization will need to expand its portfolio and find ways to capitalize on the gaps of rivals through both more strategic partnerships and further investments in its own internal sales and support staffs. And yes, some of that customer base expansion is likely to come through acquisition.

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